The unsolicited ratings on Australia reflect Standard&Poor's view of the country's ample fiscal and monetary policy flexibility, economic resilience, public policy stability, and its sound financial sector. We believe these factors demonstrate Australia's strong ability to absorb large economic and financial shocks, such as the global recession in 2009. These strengths are moderated by Australia's high external imbalances, dependence on commodity exports, and high household debt and emerging fiscal pressures associated with its aging population. The Australian economy performed relatively well in the year ended June 30, 2011, as mining exports and private investment in mining and liquefied natural gas offset temporary economic weakness associated with natural weather disasters. We believe the economy has favorable prospects for sustained
